Private and health care can go together

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Michel Kelly-Gagnon, QMI Agency

Feb 27, 2012

, Last Updated: 4:43 PM ET

For the past two decades, hundreds of hospitals have been privatized in Germany. The number of private for-profit hospitals grew by about 90%, whereas the number of public hospitals decreased by 43%. Today, roughly one-third of German hospitals are private for-profit.

The results have been striking. Thousands of poor Germans are now dying of preventable diseases, left helpless in the streets. When people arrive at the emergency room, gravely wounded and covered with blood, they are greeted by harsh guards who scream at them: "Where's your American Express card? No money, no service!" And if unable to pull their card or cash on the spot, they are violently kicked out of the hospital, coldly and callously!

Oh, wait, I got this story mixed up with a CBC documentary. That's not at all what's happening.

Actually, since this wave of privatizations (which really took place), the quality of care received by German patients has arguably improved. One reason is that most of the public hospitals being privatized were in relatively bad shape and their efficiency improved quickly in the years after privatization.

The search for profit, contrary to widespread fears here in Canada, does not lead to good services only for a privileged minority of rich patients. Private for-profit hospitals treat all patients, not just privately insured ones. Hospitals compete for patients, who are free to choose to be treated in any of them. Hospitals are then reimbursed a flat sum, depending on the complexity of each case.

The statistical data from Germany show that private for-profit hospitals provide better quality care in several areas, as compared to public and private not-for-profit hospitals. For example, they admit patients faster than other types of hospitals and have the highest average length of stay, even though the same flat sums are paid for patients by the public insurance. This means that contrary to widespread fears, they do not cut corners by discharging patients who are not healthy enough.

This is taking place within the context of a universal health care system, where 90% of the population is insured through statutory health insurance and the remaining through mandatory private health insurance. Nobody is left without care.

As in any market, private for-profit hospitals have to be high achievers if they want to keep a positive corporate image. They are subject to very strict transparency and quality assurance mechanisms and the local media act as watchdogs, scrutinizing the quality of care in the local hospitals.

It should also be noted that the length of waiting times for medical procedures in Germany is much lower than in Canada.

Long wait times in emergency rooms, which of course are a daily occurrence in Canadian hospitals, are also unknown in Germany.

Again, when you need to be better than your competitor to attract clients and make profits, why would you allow the situation to deteriorate to the extent that we are used to in Canada? It just doesn't make any business sense.

Canadians have been lied to by leftist ideologues for way too long. It is more than time that they be told the truth: it is perfectly possible to have good universal health care that benefits all citizens, rich and poor, while allowing, at the same time, freedom of choice for patients and the private delivery of health care.

European countries like Germany are a living proof of this claim.

Michel Kelly-Gagnon is president of the Montreal Economic Institute (www.iedm.org)